(Bloomberg) — Moelis & Co., the New York-based investment bank, expects well-funded digital startups to acquire more brick and mortar companies in India as they tweak strategies to cater to clients in the world’s second-most populous country.
“Companies in the digital world realize that given the size and scale of India, it is not just digital that wins but phygital — physical plus digital,” Manisha Girotra, chief executive officer, Moelis India, said in a Bloomberg Television interview. “The digital companies are very well capitalized and will look to acquire mid-cap companies in the physical world.”
The phygital push comes as Indian tech startups are joining an IPO frenzy, in which firms raised more than $10 billion this year in Mumbai via listings, according to data compiled by Bloomberg. Ride-hailing firm Ola, hotel-booking startup Oyo Hotels & Homes Pvt, and digital payments company Paytm are among companies waiting to tap the public markets.
Moelis also expects information technology services and pharmaceutical companies to continue to make acquisitions globally for scale and to access new markets. Private equity firms will keep on investing in Indian pharma, IT and consumer services companies, according to Girotra.
“M&A activities will continue to be robust in next 24 months,” and bankruptcy opportunities will enable stronger companies to take over weaker ones, Girotra said.
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